A buyer just picked up 79,500 EEM July 31 Puts on the CBOE, in a delta neutral trade vs $31.50 stock. Trade will open and suggests a desire to hedge short term (one week) downside risk in the emerging markets ETF.

Notable call volume in Sunoco today, with shares near $22.48, up 3%. 16,000 calls have traded, 10x the number of puts, with most of the action in the upside Aug 25 calls, with 10,000 on the tape from 50 to 64cents while shares barely moved. Typical daily call volume in SUN is 2800 contracts, and ISE data confirms most of the buying to be opening for a customer account. Earnings due early August and today’s buyer appears to be comfortable spending more than $500k to gain upside exposure in the name.

Ahead of tonight’s earnings, Infosys option volume is well above normal, with nearly 50,000 contracts trading, or 8x normal daily volume. Largest block went up near 11am, with a seller of 15,000 July 35 puts against a buy of 15,000 Aug 40 calls for a net credit of 1.20. With shares near $34.50 at the time of the trade, the initiator is making a significant bullish bet that pays off best gains if shares lift through the 40 strike. July puts were sold at implied vol nearly 20points above the August 40s, illustrating the additional premium due to earnings risk.

Interactive Brokers (IBKR) shares are up 10c to $15.10 option volume 3x daily average. Activity is in the later months with volume leader being the Sep. $15 puts which have traded 2,650 contracts with 75% occurring at the 95c bid. The December $15 calls have traded 1,350 contracts with 65% occurring at ask. While this combo seems bullish it should be noted OI interest in both strikes is sufficient to cover. Most of the 11,000 contracts open in the Sep $15 puts were opened across three days in mid-may when stock was $14.50 and puts traded around $1.80 a contract.

Verigy (VRGY), a Singapore-based semiconductor company, is down $1.14 to $10.11 after lowering earnings guidance and announcing plas to offer $110 mln in convertible notes. Shares are down, volume and volatility are up. Total options volume is running 23X the usual, with buyers of July 10 puts leading the flow. Implied volatility moving up to 61, from about 57 the day before.

AIG is down $2.50 to $10.60 and 41,000 puts traded Thursday morning, compared to 12,000 calls. Shares are down and options are active after Citi noted that AIG shares have been cut in half since a reverse split on July 1 and the ease of borrowing has increased. Consequently, short sellers are back in full force and betting on further financial woes for AIG. The stock continues to take a beating Thursday and implied volatility is up to 185, from about 176 late Wednesday.

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Cisco (CSCO) is up 14 cents to $18.27 and Aug 19 calls are active. More than 20K traded, including 6,500 bought-to-open on the ISE in early trading, according to sentiment data. Implied volatility up to 37.5, from about 37 the day before.